Despite rebounding from last week’s lows, Stellar’s price action is weak, which could soon prepare XLM for a significant decline. Stellar Lumens (XLM / USD) got off to a great start in September, gaining over 30% in the first week and rising above the 200-day moving average. Last Tuesday, however, the impressive run of form came to a screeching halt.
Bitcoins (BTC / USD) A sudden 20% drop sparked mass liquidations across the cryptocurrency market, and XLM was one of the hardest hit. At its lowest point on Tuesday, Stellar price was nearly 60% below Monday’s high before recovering and ending the day 20% lower at $ 0.3357. However, while XLM is up from last week’s low of $ 0.2755, the price action is not encouraging.
XLM price prediction
The daily chart shows that the current XLM price of $ 0.3175 is between the 50- and 100-day moving averages. The 50 DMA at $ 0.3326 is the initial resistance level and has successfully capped the price for the past three days. Below the market, the 100 DMA offers the first significant level of support at $ 0.3032.
It is noteworthy that trading activity had subsided after Tuesday’s big sell-off. The drop in volume suggests that buyers are not stepping in to take advantage of the discount. This will likely cause the price to drop below the DMA of 100, triggering a fall to the July lows of around $ 0.2000.
However, this bearish view is based not just on Stellar, but on the entire cryptocurrency market. And if Bitcoin and Ethereum (ETH / USD) stage strong rallies, Stellar price is likely to catch up. While I am in favor of the downside move, if XLM trades above the 100 DMA, my bearish view will be invalidated.
Stellar Price Chart (Daily)
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